NEW YORK — The Clearing House Association, Bank Policy Institute, Consumer Bankers Association, and American Bankers Association sent a letter late yesterday to the Consumer Financial Protection Bureau calling for the Bureau to extend the compliance deadline for its forthcoming rule governing consumer financial data known as Section 1033. The letter recommends that the first tier of banks required to comply with the rule be given at least two years to comply with the new rule. This would allow enough time for banks to develop new systems and processes and for a standard-setting organization to be recognized by the CFPB.

“Banks spent years developing systems to enable safe data-sharing for 50 million customers and overhauling these systems to comply with this new rule will take time,” the Associations stated upon filing the letter. “In the interest of protecting customer data and avoiding disruptions, it’s better to get it done right than to get it done quickly. Banks are committed to serving their customers and complying with the law, and we encourage the CFPB to recognize the complexities of the new requirements and establish pragmatic timelines that allow for a smooth implementation with no disruptions to consumer data access.”

The Associations pointed to significant operational hurdles in their letter, including:

1. Implementation Challenges: Banks will need to upgrade technologies, standardize data, develop operational policies and procedures, build new functionalities, work with third-party partners and refresh public-facing resources.
2. Coordination and Collaboration: Agreements with existing third parties will need to be reviewed and banks will need to coordinate with those entities to amend those agreements to meet the new obligations.
3. Standard-Setting Procedures: The CFPB just recently finalized a rule establishing the procedures for a standard-setting body to seek and obtain CFPB recognition, which will be a lengthy process.  The process under which a standard-setting organization would develop consensus standards would take even more time.

The associations also recommend extending the compliance deadlines for subsequent groups of entities by 18 months, consistent with the CFPB’s proposed phased approach to ensure all stakeholders have sufficient time to meet the new requirements.

To access a copy of the letter, please click here.

About The Clearing House Association
The Clearing House Association L.L.C., the country’s oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the United States, clearing and settling more than $2 trillion each business day.

Gregory MacSweeney
gregory.macsweeney@theclearinghouse.org